Flood of empty pubs hit market

The licensed property market is being flooded with cheap empty sites ahead of the scrapping of concession rates for empty commercial properties.

That is according to north-west London agency Paramount Investments.

Under the current system landlords pay no business rates on empty property for the first three months and 50% thereafter.

But from the 1 April landlords will have to pay full business rates after three months - something many pub owners will not be prepared to do if the site is not trading.

Mark Greig, managing director of the firm, said: "Pubcos will find themselves having to pay full rates on vacant property and will seek to sell. ​

"My view is that the flurry of sales will depress prices and, coupled with the effects of the smoking ban and current economic downturn, could cause a dramatic shake out in the pub property market."

Many sites are likely to be redeveloped as part of the Government's drive to create more social housing and Paramount Investments has sold over £10m worth of pubs to housing associations in the last month.

But he added this could be good for the industry in the longer term: "It might be painful initially, but it should create a healthier situation and a leaner, fitter industry."​

Widely criticised​

The vacant property rates hike have been widely criticised by agents and pubcos and the Conservatives have branded it "a straightforward revenue-raising exercise"​.

Punch Taverns property and strategy director Neil Griffiths said: "It's very disappointing. If we have empty pubs, that's a problem for us - it's as simple as that. ​

"A closed pub is of no value to us, so being penalised will be problematic. It may encourage construction vandalism, with landlords tempted to strip properties to reduce rates."